Correlation Between First Farms and DFDS AS
Can any of the company-specific risk be diversified away by investing in both First Farms and DFDS AS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining First Farms and DFDS AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Farms AS and DFDS AS, you can compare the effects of market volatilities on First Farms and DFDS AS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in First Farms with a short position of DFDS AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Farms and DFDS AS.
Diversification Opportunities for First Farms and DFDS AS
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and DFDS is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding First Farms AS and DFDS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFDS AS and First Farms is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on First Farms AS are associated (or correlated) with DFDS AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFDS AS has no effect on the direction of First Farms i.e., First Farms and DFDS AS go up and down completely randomly.
Pair Corralation between First Farms and DFDS AS
Assuming the 90 days trading horizon First Farms AS is expected to generate 1.02 times more return on investment than DFDS AS. However, First Farms is 1.02 times more volatile than DFDS AS. It trades about 0.0 of its potential returns per unit of risk. DFDS AS is currently generating about -0.07 per unit of risk. If you would invest 7,180 in First Farms AS on August 25, 2024 and sell it today you would lose (120.00) from holding First Farms AS or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Farms AS vs. DFDS AS
Performance |
| Timeline |
| First Farms AS |
| DFDS AS |
First Farms and DFDS AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Farms and DFDS AS
The main advantage of trading using opposite First Farms and DFDS AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Farms position performs unexpectedly, DFDS AS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in DFDS AS will offset losses from the drop in DFDS AS's long position.| First Farms vs. HH International AS | First Farms vs. SKAKO AS | First Farms vs. Spar Nord Bank | First Farms vs. Matas AS |
| DFDS AS vs. North Media AS | DFDS AS vs. HH International AS | DFDS AS vs. Per Aarsleff Holding | DFDS AS vs. First Farms AS |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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